Thursday, June 3, 2010

Maytag

Maytag Corporation was a $4.7 billion home and commercial appliance company, headquartered in Newton, Iowa from 1893 to 2006, and now part of the Whirlpool Corporation.

Company history

The Maytag Washing Machine Company was founded in 1893 by businessman Frederick Maytag. In 1925, the Maytag Washing Machine Company became Maytag, Inc. During the Great Depression of the 1930s, the company was one of the few to actually make a profit in successive years. At his father's death in 1940, Fred Maytag II, grandson of the founder, took over the presidency. During World War II, the company participated in war production by making special components for military equipment. In 1946, production of washing machines was resumed; in 1949, the first automatic washers were produced in a new purpose-built plant. In 1946, Maytag began marketing a separate line of ranges and refrigerators made by other companies under the Maytag name. During the Korean War, the company again produced parts for military equipment, although washing-machine production continued.
During the 1950s, the 'white goods,' or laundry appliance industry grew rapidly. Maytag first entered the commercial laundry field at this time, manufacturing washers and dryers for commercial self-service laundries and commercial operators. In response, other full-line appliance producers began to compete with Maytag in the white-goods consumer market. These included 'full-line' manufacturers such as General Electric, Whirlpool, and Frigidaire, who built not only washing machines and dryers, but also refrigerators, stoves, and other appliances. Since Maytag was much smaller than the full-line producers, the company decided to limit itself to the manufacture of washers and dryers, alongside ovens and refrigerators built by other companies, as a niche-market, premium-brand manufacturer. The company capitalized on its reputation by renaming its corporate address in Newton, Iowa, "One Dependability Square."
By 1960, Maytag had ceased marketing ovens and refrigerators, but later began once again to expand into kitchen appliances with its own design of portable kitchen dishwasher and a line of food-waste disposers. Upon the death of Fred Maytag II, the last family member involved in the company's management, E. G. Higdon was named president of the company, with George M. Umbreit becoming chairman and CEO. By the late 1970s, over 70 percent of U.S. households were equipped with washers and dryers, and with approximately 18,000 employees worldwide, the company was established as a dominant manufacturer of large laundry appliances. After the company's acquisition of Magic Chef, Inc., in 1986, a move which nearly doubled its size, the company acquired a new corporate name, the Maytag Corporation.
In 1997, a Maytag engineering team, at Maytag Laundry Appliances Research and Development, developed the Maytag Neptune line of front-load washers. A matching dryer was introduced to accompany the new washer. The company claimed that the new Neptune model saved energy costs over traditional washer/dryer sets. Production of the Neptune line was later switched to Samsung Electronics Co., Ltd via rebranded Samsung machines. In 2001, the company acquired the Amana Corporation and its appliance assembly facilities. That same year, Ralph F. Hake became the last chairman and chief executive officer (CEO) of Maytag Corporation, serving in that post until March 2006. Once renowned as the standard for laundry appliances, by 2003 the company faced increasing competition from new appliance brands in the US market, as well as from existing appliance manufacturers who had outsourced production a decade earlier in order to reduce costs. While Maytag had begun the process of shifting appliance production to lower-cost assembly plants outside the United States, by 2004 the company still produced 88 percent of its products in older U.S.-based factories. In an apparent move away from traditional company marketing strategy, company management decided on a plan to stimulate consumer purchases of new Maytag appliances before their old ones had worn out.
Costs incurred in Maytag's acquisition and integration of Amana and an increased corporate debt load led to aggressive internal cost-cutting efforts in direct materials, manufacturing, and distribution costs. Maytag introduced a 'value' priced appliance line under a separate label, Performa by Maytag. To increase sales, the company also marketed Maytag-branded 'Legacy Series' washing machines that were otherwise identical to low-end Amana models, and built in the former Herrin, Illinois Amana assembly plant. The rebranded Maytag models, later termed Amanatags by dissatisfied owners, received poor customer reviews after reports surfaced of major mechanical and/or durability problems. The company also consolidated warehouse operations and cut the number of Maytag vendors. Between 2002 and 2004, Maytag corporate management cut new-product investment in half.
An increasing chorus of consumer complaints concerning product reliability and customer service, assisted by the rapid growth of internet consumer forums, began to affect the company's reputation with customers. The company was also slow to react to customer complaints regarding its flagship Neptune washer and dryer line (labeled the Stinkomatic by dissatisfied customers), resulting in further damage to the company's reputation and a $33.5 million set-aside to settle several class-action lawsuits arising from the Neptune problems. By 2005, Maytag's market share had declined to all-time lows, sales were flat, and customer satisfaction surveys ranked Maytag near the bottom of the appliance field[4]. The problems with the Neptune line continued; in 2007, 250,000 Neptune washing machines became part of a nationwide safety recall by the Consumer Product Safety Commission due to fire danger.
On April 1, 2006, the Whirlpool Corp. completed its acquisition of Maytag Corporation. In May 2006, Whirlpool announced plans to close the former Maytag headquarters office in Newton, as well as laundry manufacturing plants in Newton, Iowa; Herrin, Illinois; and Searcy, Arkansas by 2007. Following the Maytag closure, all administration will be in Whirlpool's headquarters in Benton Harbor, Michigan. The Maytag name will still be used on rebranded Whirlpool appliances. Most Maytag employees were terminated, and some were offered jobs in Benton Harbor. The board of directors of Maytag all received five years' severance pay. Former chairman and CEO, Ralph F. Hake, received two years' base salary and two years' target bonus under his severance agreement.
On January 1, 2009, Maytag (under the ownership of the Whirlpool Corp.) changed the vested lifetime benefits of the Maytag retirees. There is a lawsuit pending in the Southern District Court of Iowa where Whirlpool has asked for permission to change the UAW bargained benefits. At this point in time, the benefits in question have already been changed without the judges consent.

Chronology
Year Event
1893 Frederick Louis Maytag arrived in Iowa by covered wagon. F.L., his two brothers-in-law, and George W. Parsons each contributed $600 for a total of $2,400 to start a new farm implement company named Parsons Band-Cutter & Self Feeder Company. They produced threshing machines, band-cutters, and self-feeder attachments invented by Parsons.
1893 Threshing machine-related injuries were all too common, and a strong need for a safer threshing machine was present. The company successfully met this need by developing a threshing machine feeder, a device which fed straw more safely into the threshing cylinder.
1902 The company was the largest feeder manufacturer in the world, and, by 1904, the Ruth was the most popular model.
1905 Maytag introduced the Success Corn Husker and Shredder.
1907 Maytag's first washing machine, the "Pastime", was produced. F.L. Maytag decided to produce these machines during the periods of seasonally related downturns in farm-implement sales. The "Pastime" washers used a wooden tub. A dolly was turned by a hand crank via wooden pegs. This turning action would pull clothes through the water and force the clothes along the corrugated tub sides producing cleaning action. A pulley allowed the machine to be operated from an outside power source such as a tractor or a windmill.
1911 A model of the Pastime with an electric motor was unveiled.
1915 Maytag developed its Multi-Motor gasoline-engine washer. This allowed customers in rural areas without electricity to utilize the automatic washers.
1919 The first aluminum washer tub was produced by Maytag. Prior to this, it had been believed in the industry that aluminum tub washers could not be built. This aluminum tub proved to have numerous advantages over the wooden tub, which had issues with leaking and rotting.
1920 L. B. Maytag, son of the company's founder, began serving as company president.
1922 Howard Snyder invented the vaned agitator. The agitator is placed inside the tub and mounted in the bottom of the tub. The concept was that, instead of washboarding or dragging the clothes, they would be gently agitated. Maytag first introduced this new washer, the Gyrafoam, and became exclusively an appliance company.
1924 By 1924, one of every five washing machines were made by Maytag in Newton, IA.
1924 Maytag introduced its first iron.
1925 Maytag was listed on the New York Stock Exchange.
1926 The company was now headed by Elmer Henry Maytag, another son of F.L. Maytag.
1926 On October 12, five trainloads packed full with Maytag Washers were shipped out to the country. At this time, it was the world's largest single shipment of merchandise. Maytag broke its own record in May 1927, and shipped out eight trainloads.
1927 Maytag had produced over a million washers.
1929 Maytag realized earnings of $6,838,883, a pre-war high. Maytag also survived the Great Depression without having a loss for any year.
1934 Maytag begins production of Maytag Toy Racer automobiles on October 11.
1940 E. H. Maytag died and his son, Frederick Louis Maytag II (grandson of F.L. Maytag), became Maytag's head at the age of 29.
1941 Maytag Toy Racer production ends on December 1. During World War II Maytag no longer produced washing machines and instead concentrated on the war effort. From 1941 to 1945, Maytag made design improvements on, and manufactured special components for, military airplanes. These parts were used in sixteen different types of combat aircraft, including the B-29 Super Fortress, the B-17 Flying Fortress, B-26 Marauder, and the P-51 Mustang.
1946 The war ended and washing machine manufacturing was geared back up in Newton, IA. Maytag began selling ranges and refrigerators.
1948 Maytag's plant number two was opened in Newton, Iowa. This facility manufactured Maytag's first automatic washers, the "AMP", introduced that year. This was the start of a new age in washing machines for Maytag.
1951 The Korean War was underway, and Maytag built parts for tanks and other military equipment alongside the washing machines.
1953 Maytag introduced its first automatic dryer.
1954 Maytag's first television advertisement was aired.
1958 Maytag introduced the commercial coin-slide washers used in laundromats.
1961 Maytag's corporate headquarters building was dedicated.
1962 Upon the death of F. L. Maytag II, George M. Unibreit became chairman of the board and chief executive officer, and E.G. Higdon was named president. The company would never again be led by a Maytag family member.
1966 Maytag produced its first line of portable dishwashers. Additionally licensed its first Maytag home appliance center.
1967 Character actor Jesse White appears in the first "Maytag Repairman" TV commercial.
1972 Daniel L. Krumm succeeded E.G. Higdon as Maytag president and treasurer, and two years later he was named chief executive officer.
1975 Maytag introduced Maytag-equipped home style laundries.
1981 Maytag acquired Hardwick Stove Company.
1983 Maytag discontinued production of wringer washers, after 76 years.
1985 Maytag introduced the first-ever stacked washer/dryer.
1986 The Maytag Company became the Maytag Corporation. It acquired Magic Chef, and started selling a full line of appliances.
1987 Maytag Corporation added a line of front-loading commercial washers.
1989 Maytag acquired the Hoover Company.
1989 Gordon Jump of WKRP fame first appears as The Maytag Repairman.
1991 Maytag contracted with Montgomery Ward & Co. for the exclusive use of the Admiral brand (acquired in the Magic Chef acquisition) on its consumer electronic goods. (Admiral would later become exclusive to Home Depot after the Whirlpool Corporation purchased Maytag).
1992 Maytag began manufacturing of dishwashers in Jackson, Tennessee.
1994 Hoover introduced the first SteamVac extractors.
1997 Maytag introduced a high-efficiency washer, the Maytag Neptune.
2001 Maytag acquired Amana. Maytag relabels some Amana-built models with the 'Maytag' brand, selling them as Maytag products.
2002 A class-action lawsuit is filed against the company on behalf of Neptune washing machine consumers.
2004 Maytag Corporation announces a loss of $9 million dollars.
2005 Maytag became the subject of a takeover battle between a private investment group in the United States. (Ripplewood), a three party group composed of Blackstone, Baird and Haier Corporation, a Chinese appliance manufacturer, and the Whirlpool Corporation. On December 22, Maytag stockholders agreed to sell Maytag to Whirlpool, ending Maytag's 112-year history as an independent company.
2006 On March 31, Whirlpool Corp. completed its acquisition of Maytag and began integrating the two appliance companies.
2007 Clay Earl Jackson becomes the new Maytag repairman featured in advertising campaigns. During this year, Maytag also celebrates the 100th anniversary of the Pastime washing machine by releasing the Centennial Washer and Dryer pair.

In major appliances, Maytag was among the top three companies in the North American market, offering a full line of washing machines, dryers, dishwashers, cooktops, refrigerators, and ranges under the Maytag, Hoover, Jenn-Air, Amana, Magic Chef, Dixie-Narco, and Jade brands.
Maytag sold multiple small appliances including a cordless iron under the Maytag brand, a mixer and blender under JENN-Air; the company also sold the popular Skybox and Rookie home-vending products.
In floor care, Maytag owned the Hoover brand, the market leader in North America and the floor-care brand with the highest consumer recognition and buying preference.
In commercial products, Maytag owned Dixie-Narco, a leader in refrigerated soft drink and specialty vending machines as well as Jade cooking products and Amana commercial cooking products.
Maytag had presence in markets around the world, including sales operations in Australia, Mexico, Puerto Rico, and the United Kingdom. The corporation's export sales and marketing, licensing of brands, and international joint ventures was coordinated by Maytag International in Schaumburg, Illinois.

Maytag International

In 1988, DOMICOR was established as Maytag Corporation's international division and in 1992 became Maytag International, Inc. which eventually encompassed all of Maytag's worldwide ventures including Maytag Australia, Maytag Canada, Maytag Commercial (Mexico), and Maytag UK.
Maytag International, was based in Schaumburg, Illinois, handled the sales, licensing and business ventures of corporate appliances and floorcare brands in overseas markets as well as the administrative support for the international sales organization. This network extended to more than 70 countries worldwide.
Maytag International was responsible for export sales and licensing of the corporation's appliances and floor care brands and joint ventures in overseas markets. This network extends to more than 90 countries worldwide. The main office is located in Chicago with major subsidiary offices in Burlington, Ontario (Canada), Monterrey (Mexico), Sydney (Australia), and London (England) and region sales offices in Beirut (Lebanon) and Guaynabo (Puerto Rico).

Manufacturing plants

At the time of acquisition, Maytag had 14 manufacturing plants throughout the United States and Mexico. These include:
laundry manufacturing plants in Newton, Iowa; Herrin, Illinois; and Searcy, Arkansas, in the U.S., and Ciudad Juárez, Chihuahua, in Mexico
refrigeration manufacturing plants in Amana, Iowa and Reynosa, Tamaulipas
cooking manufacturing plant in Cleveland, Tennessee
dishwashing manufacturing plant in Jackson, Tennessee
vending manufacturing plant in Williston, South Carolina
floor-care manufacturing plants in North Canton, Ohio, El Paso, Texas and Ciudad Juárez, Chihuahua.
subassembly manufacturing plant in Reynosa, Tamaulipas
There are also manufacturing plants in China

Ol' Lonely

Gordon Jump as the Maytag repairman
Ol' Lonely, or "the lonely repairman", is a character in Maytag advertisements, created for Maytag by copywriter Vincent R. Vassolo of the Leo Burnett advertising agency. His character was initially played by Jesse White, who retained the role until 1988. In a time in which the laundry appliances of major manufacturers had reached maturity, differing mostly in minor details, the campaign was designed to remind consumers of the perceived added value in Maytag products derived from the brand's reputation for dependability. Maytag advertisements stated “Ol' Lonely’s predicament is testimony to the durability and reliability of Maytag appliances. Now if only he had something to do with his days.” The campaign proved a huge success, allowing Maytag to set a substantial price premium, as well as strongly influencing consumer preference at the higher end of the laundry appliance market.
In 1986, the repairman was joined by Newton, a basset hound named for Maytag’s headquarters in Newton, Iowa. In 1989, character actor Gordon Jump first appeared as Ol' Lonely in the advertisement “Biker.” In total, Jump appeared in more than 77 Maytag commercials and print advertisements. He made appearances at events for employees and customers and also was actively involved in several philanthropic and charitable causes. Ironically, a former Maytag repairman was convicted of fabricating repair and expense claims.
Actor Hardy Rawls was hired to play Ol' Lonely after Jump's retirement in 2003, although he appeared only in print advertising and personal appearances. Gordon Jump died two months later on September 22, 2003. In French-speaking Quebec, Ol' Lonely was played by Paul Berval. For a period of time Maytag gave Ol' Lonely a younger sidekick character known as the 'Maytag Apprentice', played by actor Mark Devine. However, in 2005 Maytag cancelled his contract. Maytag also elected not to renew Rawls' contract, instead holding open auditions. Indianapolis Colts backup quarterback Jim Sorgi was among those who auditioned.On April 2, 2007, Maytag announced that Clay Earl Jackson of Richmond, Virginia had been selected to fill the role of Ol' Lonely.
By the end of the twentieth century, the "Maytag repairman" character had become an iconic metaphor for a professional whose services are rarely needed, such as "Most people in town now have their own cars, making the local bus driver like the Maytag repairman." Times were changing however, and events at Maytag and within the industry began to diminish the effectiveness of the long-lived Maytag- repairman campaign. Consumer demand for innovative, expensive, and increasingly complex electronically-controlled and computerized appliances, coupled with higher labor costs and complaints over Maytag product quality and service, influenced a decline in Maytag sales and profit margins. By 2004, the Maytag repairman character had become to some consumers a symbol of misplaced trust in aging marketing campaigns.[27][28] As one commentator noted, "Unfortunately things change, and, after some major quality hiccups, now it's the Maytag salesman who is bemoaning his loneliness. Maytag's reputation has plunged to the bottom with costly consumer class action lawsuits and numerous quality complaints."[29] As a partial result of Maytag's quality problems, the company reported a loss of $9 million in 2004, according to Industry Week.
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